Sunday, November 22, 2015

Higher tax on fracking seems a wise move

By Bill Sherry:

I thought David Hill did a masterly job of presenting the case for why Ohio should not levy a reasonable severance tax on fracking. I have just one question: If something goes wrong and rivers get polluted, or groundwater is infused with fracking fluids; if it turns out that the fracking causes some serious earthquake damage; or if some currently unanticipated damage occurs, will the landowners who profited be there to pay for remediation of the damage?

Will the limited-liability master drilling partnerships be there to pay for the remediation? (Oh, wait, they are incorporated as limited liability so that they can’t be made to be responsible.) Or will John Q. Taxpayer be expected to pay the tab?

Why not assess a reasonable severance tax and set a couple of billion dollars in reserve to cover potential remediation costs? Then, if 20 years from now nothing bad has occurred, all of the taxpayers of Ohio will get a nice financial dividend.
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